Setback for PF Pensioners as Centre Introduces Distinct Time Periods in Calculations

In a major setback for individuals anticipating PF pensions based on their actual salaries, the Centre’s recent decision to consider service periods before and after September 1, 2014, as separate entities has dampened the hopes of lakhs of people. Despite the Supreme Court’s ruling, which didn’t alter the pension formula, a circular issued in PF offices outlined a distinction between pensionable salaries and services before and after the specified date. The calculation involves multiplying the pensionable salary by pensionable service and dividing the product by 70. However, this decision negatively impacts those who retired after September 1, 2014, as the pensionable salary until that period, usually when most employees experience a rise in salaries, is considered separately, resulting in reduced overall pension amounts.

The differentiation in weightage also adds complexity to the pension calculation. Employees with more than 20 years of service receive a weightage of two years, but this now gets added to the period before 2014, further lowering pensions. Despite EPF issuing FAQs last year, emphasizing the consideration of the average sum of an employee’s overall salary in the last 60 months while determining pensionable salaries, the recent decision contradicts the Supreme Court verdict and is seen by many as an act of contempt of court, adding frustration and disappointment for those eagerly awaiting PF pensions in line with the court’s ruling.